Week 4 Question 1: \"Classify the following control activities aspreventive, detective or corrective and explain your reasoning,

(a) Employees have a password to gain access to the system.

(b) When sales are entered, the system retrieves customerdetails based on the customer number.

(c) A check is performed to identify if all cheques can beaccounted for.

(d) Systems development is subject to sign-off by the CIO beforeit can take place.

(e) Virus definitions are updated daily.

(f) The sales manager must approve all discounts for items soldbelow their sticker price.\"

Question 2: \"For each of the following risks suggest a controlthat could be used to reduce it.\"

(a) Entering negative values for order quantity in a salesorder

(b) Selling to a customer with an overdue account

(c) Ordering from a non-existent supplier

(d) Paying for goods that have not been received

(e) Entering an alphanumeric customer ID when the businesspolicy is for numeric customer IDs

(f) Misappropriation of goods by receiving staff, who alsomaintain inventory records

(g) Ordering too much of a product\"

WEEK 4

Question 1 Could you kindly reconsider your reasoning if youhave classified the control activities as either detective orcorrective?

Question 2 a) Have you considered range restrictions?

b) Would a credit check help? Can a credit hold help addressthis risk?

c) Would this risk be minimised if the orders were generatedfrom a supplier master list? Would you consider independentmaintenance of a supplier master list to be useful?

d) What needs to be matched prior to payment authorisation?Still unsure? Would the matching of the purchase order, receivingreport and invoice be sufficient?

e) Would you specify filed content as 'alphanumeric' or'numeric'? (Hint: Please refer to the business policy)

f) Have you considered the likelihood of misappropriation ofgoods when duties are separated between personnel?

g) Have you thought about the reasonableness test? Would theapproval of quantities to be ordered help minimize the risk? Canordering policies be useful in this scenario?